Employees who work hours exceeding their standard shifts must be compensated accordingly with an overtime pay rate. Employers who misclassify employees for purposes of avoiding overtime payments, or who otherwise fail to adequately compensate employees, are subject to substantial fines and may potentially face class action lawsuits. Strict and careful compliance with federal and California labor laws is essential for businesses which wish to avoid costly litigation and civil penalties.
At Bellatrix PC, our employment law attorneys have extensive experience representing corporations, partnerships, and limited liability companies in overtime lawsuits, misclassification lawsuits, and wage disputes. We bring a sophisticated knowledge of California labor codes and a results-oriented approach to each case we handle, providing versatile legal services ranging from contract negotiation, to mediation, to litigation should aggressive action become necessary to resolve your matter.
To set up a private legal consultation, call Bellatrix PC at (800) 449-8992.
California Overtime Pay Rates: Laws and Regulations
Put simply, any work performed beyond the normal hours of employment is considered overtime. However, the rules and regulations governing California overtime pay calculation and work limits are anything but simple.
In California, overtime is regulated by the Department of Industrial Relations, of which the Division of Labor Standards Enforcement (DLSE) or Labor Commissioner’s Office is a crucial component. The DLSE is tasked with “adjudicat[ing] wage claims, investigat[ing] discrimination and public works complaints, and enforc[ing] Labor Code statutes and Industrial Welfare Commission orders” – including those pertaining to overtime.
Under California law, nonexempt employees are limited to working eight hours per day for a total of 40 hours per week. Any work which exceeds these limits is counted as overtime, and must be compensated accordingly. California’s overtime rates – at bare minimum – are as follows:
- One and half times the employee’s normal pay rate for any work performed:
- Beyond the eight-hour cut-off, up to 12 hours in a single workday.
- The first eight hours worked on the seventh consecutive day of work.
- Twice the employee’s normal pay rate (double pay) for any work performed:
- Beyond the 12-hour cut-off noted above.
- Any work beyond the first eight hours which is performed on the seventh consecutive day of work.
To reiterate, the above overtime rates represent the minimums permissible by law. Employers must pay at least these rates.
Which Types of Employees Are Exceptions?
It is also important to address the crucial differences between the following employee categories as they pertain to overtime pay:
- Nonexempt Employees – Employees to whom the aforementioned overtime rules apply. In more general terms, nonexempt employees are employees who are not subject to Industrial Welfare Commission wage orders, which set standards for matters such as minimum wage and meal and rest periods.
- Exempt Employees – Employees to whom the aforementioned overtime rules do not apply.
- Exception Employees – Being an “exception” is not the same as being “exempt.” Being exempt means no overtime rules apply at all, whereas being an exception means that special, non-standard overtime rules apply. Some examples of employees who are exceptions to standard overtime laws – all of which are subject to their own, profession-specific pay regulations – include the following:
- Ambulance Drivers
- Camp Counselors
- Hospital Workers
- Live-In Employees
- Nursing Home Managers
- Personal Attendants
It is important to emphasize that employers are liable for providing overtime compensation even in cases where the employee exceeds authorized overtime limits. However, in the interest of preventing employees from exploiting this requirement, California law also permits employers to discipline employees who surpass overtime thresholds. Moreover, employees are not permitted to deliberately conceal their violations from employers in order to force an overtime payment. Employers are liable for compensating excessive overtime only in instances where the employer “knew or should have [reasonably] known about” the work being performed.
Further, misclassifying employees and independent contractors can lead to major legal issues, including class action lawsuits. It is important to consult with an experienced legal professional when classifying employees and independent contractors to ensure compliance with all laws and reulations.
Employer Penalties for Labor Code Violations
In some situations, determining the regular rate of pay is very simple. For example, if an employee is paid an hourly wage, then that number is the regular rate of pay. For other types of employees, the calculation is less straightforward. For example, to calculate the regular rate of pay for a salaried employee, the employer must (1) determine monthly compensation, (2) multiply by 12 to get the annual salary, (3) divide annual salary by 52 to get the weekly salary, and (4) divide weekly salary by 40. This produces the regular pay rate.
It is critical to calculate the regular rate of pay accurately so that overtime pay may be calculated correctly in turn. Our attorneys are well-versed in California’s overtime and wage laws, and will help you make an accurate calculation so that you can avoid facing penalties for labor law violations.
Under Cal. Lab. Code § 1194(a), “Any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit.” The exception would be a case where the employer and employee agree upon a lesser wage in advance.
Other potential penalties for labor code violations include:
- Missed Meal and Break Penalties – One hour of pay per day with no meal and break period
- Payroll Period Violations – Up to $100 per pay period, per employee
- Wage Statement Penalties – Up to $4,000
- Waiting Time Penalties – Up to 30 days of pay
If your company has been accused of committing overtime violations, minimum wage violations, misclassifying employees, or other labor law violations related to employee compensation or meal and rest periods, the experienced employment law attorneys of Bellatrix PC can provide knowledgeable and experienced legal assistance. To start discussing your situation and how we can help in a confidential consultation, call our law offices at (800) 449-8992 today. Also, don’t forget to ask about our business risk review.